Virtual Worlds Not Quite Virtually There for Business Communications and Collaboration

Brian Riggs Research Director, Enterprise Software and Communications

Brad Shimmin Principal Analyst, Application Infrastructure

| Aug 26, 2008 | Enterprise Technology and Software | Advisory Report

| Analysts: Brian Riggs, Brad Shimmin

Issue

Virtual world environments are a form of social networking that have had a considerable impact on the gaming and entertainment software industry, but to date, the use of converged, avatar-based online interaction has not made an impact on the market for business communications and collaboration solutions.

As with other collaborative mechanisms, such as instant messaging, this will likely change over the coming years as Web conferencing and communication infrastructure providers seek to leverage this consumer-led approach. Nortel, for example, is making multimillion dollar M&A and R&D investments specifically tied to creating virtual world environments for business users with the introduction of a still beta solution called web.alive. IBM and Cisco have also been very active in this area, finding ways to leverage public virtual world environments and facilitate third-party platform developers in the creation of new social networking tools directly relevant to business users. But at present, the integration of virtual world environments with business communications and collaboration technology is less of a product trend and more of a R&D fad. Investments are certainly being made to develop virtual world plugs-ins for existing communication and collaboration platforms such as Web conferencing, CRM and project management.

Consumer-oriented virtual worlds are being leveraged for a variety of business uses. However, it remains uncertain if business customers will find the advantages of corporate virtual world environments compelling enough to contribute the infrastructure, training and support necessary to support such an effort. Until a stronger business case can be made for enterprises to invest in this still experimental form of social networking, efforts such as Nortel's will remain a compelling vision for collaboration but foremost a curiosity for enterprises.

Current Perspective

The notion of a virtual world where groups of like-minded individuals can mingle, using many of the paradigms customarily available only within the physical realm is certainly compelling. Its efficacy has been born out over the past two years with the rapid emergence and growth of virtual world environments ranging from first-person video games (most notably World of Warcraft) to more general online watering holes (such as Second Life, Qwaq, Multiverse, etc.). In these fully electronic realms, participants can adopt an online persona (called an Avatar) and join others online to play a game, keep in touch with family and friends, or simply mingle.

To date, most virtual world solutions have centered upon consumer concerns, but as with consumer-driven services such as Youtube.com or instant messaging, virtual world environments have begun filtering into the enterprise marketplace. Enterprise-based uses for virtual world environments include direct commerce (B2B, B2C, etc.), community building, training, research, marketing, public relations, events and customer relationship management (CRM), Forward-thinking vendors such as Cisco, for example, has employed virtual world technologies to communicate with customers and partners. The company is among a handful of communications vendors actively leveraging the Second Life virtual environment for sales presentations, executive Q&A sessions, user group meetings, and other business communications purposes.

IBM has been investing in virtual world research since 2006. It is in the process of integrating its Sametime and unified communications and collaboration platform with Forterra’s On-line Interactive Virtual Environment. IBM has also made use of Second Life, having recreated a state-of-the-art eco-friendly data center on Second Life for its customers to tour. More recently, in August 2008 Nortel purchased DiamondWare, a developer of real-time voice technology that provides a three-dimensional sound experience to virtual world environments. At the same time, Nortel unveiled web.alive (code-named Project Chainsaw), a virtual world environment that the company hopes to make available to businesses for Web-based meetings, employee and partner collaboration, training sessions, and CRM.

Virtual worlds open up new and exciting possibilities for business communications and collaboration. They provide a forum for very large groups of individuals to interact with one another in a way simply not possible with today’s audio conferences, video conferences, telepresence sessions, and workgroup-based web collaboration platforms. Users have more control over who they interact with and how the interaction is to take place. For example, during a typical audio conference call, it is often difficult for attendees to know who is talking at any given moment, unless they are familiar with each attendee's voice. In a virtual world environment, users can easily identify speakers based upon that person's avatar. Also, users are able to more fluidly interact with other participants without disrupting the current speaker.

This ability to combine group/public and side bar/private communication seamlessly is an important hallmark of virtual world environments. Users attending a group/public function may use non verbal queues such as proximity, appearance and gesture to communicate. Or users may more directly engage in private instant messaging (IM) conversations, which may move effortlessly into a group/public IM session within the broader collaboration space – all without interfering with the meeting at hand. Integrating unified communications technologies with virtual world environments will also allow users to view presence, availability and location information of colleagues in the virtual world environment. Virtual world meetings will be scheduled and initiated from existing calendar applications. Document sharing, application sharing, white boarding and other collaborative applications used in the enterprise today will also be employed within virtual world environments. The integration of enterprise communications software will make available higher quality voice communications to participants.

Government agencies and military organizations have proven themselves very interested in the technology for training purposes. This has provided companies like Forterra and Nortel’s DiamondWare with a base of paying customers and experience in positioning virtual world platforms for professional use. This could be a significant break that developers of virtual world communities have been waiting for when it comes to crossing over from the consumer market and selling to a broader base of business customers. Use of virtual world collaborative tools in the public sector could give private businesses insight into how they too can leverage the technology for improvements in employee productivity and group collaboration. And virtual world platform developers are benefiting from and actively taking advantage of trends in the businesses communications and collaboration market toward software-based systems that integrate with a wide range of business applications. For example, Second Life has not only opened its APIs to third-party developers, the company has created a software-as-a-service hosted solution (the Second Life Grid) and an open source client targeting enterprise customers directly.

Presently though virtual worlds remain very much the purview of online gaming communities and consumer-oriented social software environments. Outside of isolated pockets of end-users, virtual worlds remain largely uncharted territory for companies already making significant investments in implanting IP telephony, unified communications, fixed-mobile convergence, Web conferencing, and a variety of other high transformative communications technologies. Common to all these transformative communications technologies is the insistence of business buyers that the new platforms be perfectly secure, governable, and able to make use of existing IT resources and applications. Employees’ use of virtual worlds could bypass corporate security policies and as a result make business buyers skittish in investing in them.

Similarly, without the ability to fully integrate internal systems such as messaging/e-mail, enterprise users will be unlikely to integrate virtual world tools into their daily routine. At this time virtual worlds are in no way ready to substitute, or in many cases even supplement, current communications and collaboration technologies. Avatars have been seeking a home in corporate world for more than a decade. Start-ups have been advocating their use in business-oriented social software environments since the days of the dot com bubble. Yet businesses have remained reticent to adopt this technology, instead opting for more traditional forms of communications and collaboration software tools that fit more readily into existing modes of communication and collaboration.

Developers of communications and collaboration software are expanding their product initiatives to integrate real-time communications systems, productivity applications and collaboration software into virtual world environments. Conversely, virtual world vendors are working to both empower these undertakings and create direct opportunities through SaaS and managed hosting solutions. These moves, coupled with the current economic climate and rising energy costs that favors collaboration without physical travel will create forward momentum for these projects. Already conferencing vendors of all stripes (audio, video, Web) are reaping the rewards of these market pressures. However, virtual world solutions will need to do more than open their doors to developers and provide hosted offerings. Virtual world solutions must slip seamlessly into existing IT environments.

The need for security, manageability and enterprise application integration (mentioned above) will create a distinct but short-lived opportunity for existing enterprise collaboration providers to deliver virtual world capabilities within existing, enterprise IT-proven products. It is likely that these traditional enterprise vendors (IBM, Microsoft, Oracle, Cisco, and others) will lean upon external partnerships with third-party virtual world providers to this end, though no substantial, productized moves have been made as yet. Nonetheless, as these projects go forward, it is likely that more enterprise customers will find a more compelling business case for virtual world collaborative tools that is currently lacking.

Recommended User Actions

• Companies that believe they can benefit from virtual world environments integrated with business applications and enterprise communications software should begin experimenting with Second Life, Google Lively, Multiverse and other public communities. These can be used to test the effectiveness of virtual world environments in facilitating meaningful collaboration and improved productivity among dispersed groups of employees and workgroups.

• Customers wishing to investigate these offerings should note that many vendors (as with Second Life) offer sandbox or fully functioning hosted, white label services that can be readily integrated into an enterprise environment. However, this level of integration is often limited to branding only and does not provide any substantial level of information security or control.

• Nortel customers should query the company on its long term roadmap for web.alive. This solution is still very much experimental with no clear vision for productization. To that end, customers should press Nortel on which of its own or its partners’ collaboration and communications applications will be integrated into web.alive. This knowledge will help customers wisely plan their long-term investments in relevant business and communications software.

• As virtual world environments integrated with business applications and enterprise communications software begin to come to market, customers should make sure user interfaces are highly intuitive and do not require substantial training efforts. Non-intuitive interfaces that often require users to learn a number of platform-specific keystrokes or knowledge (such as IRC shorthand) could turn a productivity enhancing tool into a productivity drain and bring an early end to initial projects.

• There is no harm in investigating any reasonable solution proposing business benefits. Customers seriously interested in virtual worlds for business purposes should query several developers, such as Second Life, Forterra and others for use cases of reference organizations that are actively engaging in virtual world interactions for tangible business benefit. Security, compliance, and other top line enterprise issues should be readily discussed with developers during early stages of product investigation.

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Recommended Vendor Actions

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